Dr. Kaan Kurtural, a viticulture specialist with the University of California in Davis, explains how the supply chain crisis is impacting the wine industry. FOX Business' Kelly O'Grady reports.
The wine industry is experiencing supply chain bottlenecks amid a "shortage of bottles," Dr. Kaan Kurtural, a viticulture specialist with the University of California Davis, said.
Kurtural pointed out that the industry is currently facing even more issues, including seeds being "difficult to come by" and the price of fertilizer shooting "through the roof."
"It’s millions of dollars of investment these folks have made over many generations, so hopefully it’ll be resolved soon," Kurtural said in an interview that aired on "Cavuto: Coast to Coast" on Wednesday.
Demand for wine has increased during the coronavirus pandemic, as Americans sheltered in place to avoid potential infection.
Market research and analysis firm Nielsen reported that wine has led as one of strongest alcoholic categories last year.
As the demand for wine increased, the industry has been dealing with a severe drought and now supply chain issues on top of that.
The National Oceanic and Atmospheric Administration has reported California and several other Western states have had the hottest summer on record, exceeding the 1936 Dust Bowl Summer only by less than .01 of a degree.
Almost 60% of the west is facing "extreme drought" conditions, and 98.32% of the states are facing "abnormally dry" conditions.
Vineyard in Napa Valley, Napa County, California (United States) (iStock)
And the situation doesn’t seem to be alleviating any time soon. According to the National Oceanic and Atmospheric Administration’s 2021 winter forecast, the likelihood of precipitation in California is significantly below average while temperatures run well above average. Also, California is already running a water deficit.
The annual wine and food festival kicked off in New York City last week. FOX Business’ Lydia Hu speaks with Mario Chape of Big Papa Smoke’M Restaurant.
FOX Business’ Kelly O'Grady reported on Wednesday that wine production is down an average of 20% and in some vineyards, it’s as much as 60%.
She noted that in many cases "the vines have actually died," which could impact harvests for years.
RECORD BACKLOG OF SHIPS AT CALIFORNIA PORTS AMID SUPPLY CHAIN CRISIS
Several companies have noted higher logistics-related costs and disruptions to their normal operations. Vineyards are no exception as the backlog at ports and the truck driver shortage are leaving them short of products.
The issues have also impacted consumers in the form of empty shelves and higher prices, prompting fears that lower spending will slow the economic recovery.
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Earlier this month, it was revealed that U.S. consumer prices in September accelerated at their fastest annual pace in 13 years. The Consumer Price Index rose 5.4% year over year last month, according to the Labor Department, matching the July reading for the hottest print since 2008. Prices increased 0.4% month over month. Analysts surveyed by Refinitiv were expecting prices to rise 5.3% annually and 0.3% in September.
According to the Labor Department, the price for wine at home in September increased 1.6% from the same time last year.
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FOX Business’ Jonathan Garber and Fox News’ Jiovanni Lieggi, Cortney Moore, and The Associated Press contributed to this report.
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October 28, 2021 at 01:13AM
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Supply chain bottlenecks sour wine industry amid bottle shortage - Fox Business
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